The calendar marches on and with the start of October, the end of fiscal year (FY2012) arrived.
With that milestone on the calendar reached, the federal government announced that it ran a deficit in FY2012 of about $1.1 trillion.
For those of you who like your numbers written out in digits that would $1,100,000,000,000.
There are organizations and people who have the responsibility of attempting to predict what the deficit will be. I have written about budget predictions before (see here and here and here).
The overriding theme from those posts is that people and groups who make predictions about the budget are wrong.
This veridiction (my made-up name for the process of verifying predictions) posting is about predictions made about the FY2012 deficit.
Back in January 2003, The Washington Post ran a story about how the Congressional Budget Office (CBO) updated its projections from August 2002. Here is the graphic from that story…
Apologies for the pencil markings on the bottom
As you can see, the August 2002 estimate from CBO showed the federal government running a surplus at the end of FY2012 of $522 billion. The January 2003 revision cut the projected surplus to $451 billion. Those surplus numbers are a far cry from the actual deficit of $1.1 trillion.
In fact, if you can make out my pencil scrawlings at the bottom of the graphic, the CBO did not correctly predict the deficit or surplus for any fiscal year between 2002 and 2012.
Not to be dissuaded from their continued track record of failure, the CBO jumped on the prediction horse again and again. Five years later, the Post had another story about budget predictions. In this graphic, the CBO prediction competes for space with a prediction made by the Bush Administration.
Apologies for the misalignment
As in 2003, this 2007 prediction is off by a country mile.
The CBO predicted that the federal government would run a deficit of $146 billion at the end of FY2012 while the administration of the 43rd President signaled a surplus of $61 billion. Again, numbers that are far removed from the actual of $1.1T.
I’m not sure why people continue to make predictions about the budget because they – for the most part – are wrong. Not just wrong, but completely and fantastically wrong.
However, with the start of FY2013, I’m sure the CBO and the current administration will try again and gaze into their cracked crystal budgetary ball.
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